The Hindu Business Line : Industry hopes cost of diesel generator power can be shared

Chennai, Sept. 18 Industry representatives in Tamil Nadu hope that the State Government and other consumers will bear the additional cost if they turn on the diesel generator sets to tide over the power shortage in the State.

Over the last one week, the Government has been consulting the industry on ways to tackle the power shortage. Last week, it suggested that the Government could tap about 1,000 MW of the 3,500-MW capacity in diesel generators available with industrial units. But the catch is that this is a high-cost power — cost works out to about Rs 12 a unit, almost three times more than the cost of grid power — and the Government would have to bear the additional cost.

Earlier this week, the Electricity Minister, Mr Arcot N. Veeraswamy, had asked the industry to come back with a proposal. At the meeting of the industry representatives led by the Confederation of Indian Industry (Southern Region), it was felt that the additional cost to industry would be Rs 750-1,000 crore a year to supply about 1,000 MW of power from diesel generators for four hours a day.

However, the Government would have to foot the bill, which could also be shared among the other consumers — such as the domestic and other commercial segments like retail and office users. Industry’s point of view is that power cost in Tamil Nadu is among the highest at Rs 4.50 a unit for industry. This was primarily because the industry cross-subsidises the other users who pay a lower price.

But, as a proportion of power consumption, industry uses just about a third of the power generated. Domestic consumers and the retail and commercial segments account for 55 per cent while agriculture, which gets free power, consumes about 20 per cent.

If the industry were to generate high-cost power with diesel generators, it is only fair that the other paying consumers foot a portion of the bill if the State Government cannot fully bear the subsidy, the industry felt.

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